Lululemon ($LULU) – Bullish Sell-Side Channel Checks – June 01, 2024
Bearish Lululemon opinions are as in style as its yoga pants. That will happen to all companies from time to time – even sell-side darlings like this one. Share price has a way of drawing out the Monday Morning Quarterbacks. This week, Morgan Stanley bucked that trend. Its high frequency sales data is pointing to Lulu’s U.S. growth outperforming expectations and potentially creeping back above 10% Y/Y. That would be a positive surprise and could easily be rewarded for a company trading at multi-year lows for profit multiples and with U.S. strength the key investor concern. It sees potential for Q2 guidance outperformance, but notes the added uncertainty surrounding the brand will not vanish overnight from next week’s report. It kept a buy rating on the company and lowered its target from $490 to $404 (tracking share price).
